Faction can be obtained in many ways, such as the RFQs (repeatable faction quests), Alliance battles, quests, and the PvP Missions. However, the problem is...what do you do with that faction? Herein lies the problem...
The only use now for Faction is the Befrending... Quests, since you need to complete them to continue the storyline. I don't really consider that a use, since it does not involve spending the faction.
There are only 2 possible uses for Faction:
1. Amber/Jade
Donate 1k faction and receive a lovely gem. However, there is ONLY ONE USE for those gems.
And that is armor. If you don't like the respective armor, you have no use whatsoever for the gem.
Recently, the prices of each gem have greatly decreased, making them more difficult to sell and easier to buy, thus reducing the need for using Faction to buy the gem. (Unless you are saving up for the armor. Like me. I want that 15k Kurzick Female Ranger

A recommended change would be to allow Amber/Jade to be used to craft ideal weapons.
2. Town Control/Elite Mission Access
Here's the crux of my argument.
When you donate 5k Faction to that little punk in your guild hall, it goes to your Alliance. But then what does that do?
It gives you control over a town. And all you get is a merchant with 20% off all items (if you took the faction and purchased Amber/Jade you'd make a much greater profit than the merchant), and a fireworks master (which is a gimmic, trust me.)
However, there are two towns where the ownership grants another thing: the ownership of House zu Heltzer and Cavalon.
Owning these towns grants anyone in that alliance [/i]and anyone who they want[/i] to enter the Elite Mission within (Urgoz's Warren for House zu Heltzer, and The Deep for Cavalon.)
Therefore, person in the controlling alliance lets you enter the Elite Mission, then what's the point of donating faction to the little punk?
Let's take the current affairs into perspective.
The most notable example of this is the ownership of Cavalon. The Crusaders [TC] own it with 6 million Luxon faction. They "ferry" people into The Deep at no charge.
Henceforth, no one will contest them. As evidence, the second-place Luxon alliance has only 2 million faction.
The Kurzick side, since last night, is similar. Komalis Protector [oOo] (The Alliance I'm in: if you've seen Syria Blackblood ferrying, that's me.
[oOo] currently has 9 mil and counting. The second-place Alliance is close behind with 8.6 mil (won't discuss those politics here...mainly because I don't understand them). The third-place Alliance, however, has a mere 4 million faction.
So, why would people want to donate faction to that little punk if the end-result is available to everyone? (Well, besides the controlling guilds, heh)
Therein lies the problem: Faction is useless. The entire Faction system is broken, and needs to be fixed.